With the combined experiences of Quantity Surveying, Construction and now law, co-projects are ideally suited to assist Principals, Contractors & Subcontractors with applications and/or responses to a payment dispute under the Construction Contracts Act. This Act provides for a timely and cost effective means of resolving a payment dispute under a construction contract with a provisionally binding award. Whilst this does not determine the final legal rights of the parties it often leads to the resolution of the claim.
As a Registered Adjudicator Co-projects can also determine a payment dispute under the Act.
Similarly, Co-projects can assist in the preparation and/or assessment of claims under a construction contract together with the resolution of claims and disputes by means of amicable settlement between the parties. Co-projects also has experience working with lawyers in the resolution of disputes.
These skills have been employed for the benefit of EPC clients in administration of major subcontracts and where there is often a need for the payment certification of complex matters. The value of claims assessed range from $0.5M to $800M within Building, Civil and SMP type disciplines.
David's Graduate Diploma in Construction Law strengthens co-projects main focus to add value for its clients in this core skill area.
Further details on Adjudication can be found at www.buildingcommission.wa.gov.au/bid/payment_disputes.aspx
Frequently Asked Questions
What is the Construction Contracts Act?
The Act supports security of payment in the building and construction industry. It provides the industry with simple and secure tools to enforce the right to be paid under a contract.
What is covered by the Act?
The Act will apply to construction contracts including home building contracts. The Act applies to all construction contracts on a project, from the head contract between a project owner and the head contractor down to all subcontractors and suppliers on site.
The Act covers construction work that is undertaken in Western Australia including but not necessarily limited to work in preparing the land, building the work and installed any fixtures that form part of the work in relation to building. Work includes altering and repairing an existing structure. There is also provision under the Act for construction work to include the supply of goods and services, including work done by off site fabricators and the work of professions related directly to the construction work, including design, drafting and management.
What is excluded from the Act?
There are some exclusions. Work in discovering or extracting oil or natural gas is excluded as well as the mining for minerals and the constructing of plant for the purpose of extracting oil or minerals. There is also and exclusion for wholly artistic works.
What happens if there is no written contract?
The contract need not be a written contract. The Act covers verbal agreements where the contract has no written provisions by providing implied terms and conditions that;
- cover the amount the contractor is entitled to be paid for obligations performed.
- allow for the contractor to make a claim for a progress payment.
- set out how to make a claim for payment.
What do I do if I am not paid in accordance with my contract?
When a party to a construction contract believes it has not been paid in accordance with its contract, the Act provides a rapid adjudication process that operates in parallel to any other legal or contractual remedy. The rapid adjudication process is a trade off between speed and efficency on the one hand, and contractual and legal precision on the other. Its primary aim is to keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes. The process is kept simple and therefore cheap and accessible - even for small claims.
Can I appeal?
In most cases the parties are satisfied by an independent determination and will get on with the job. If a party is not satisfied, it retains its full rights to go to court or any other dispute resolution mechanism available under the contract. But in the meantime, the determination stands and any payments ordered must be made "on account" pending an award under a more formal and precise process.
Who is a Claimant?
A claimant can be a person or organisation that presents a payment claim in the event of a payment dispute. The claimant can be;
- a contractor claiming against a principal, or
- a subcontractor claiming against a contractor, or
- a supplier of goods claiming against a subcontractor.
Who is a Respondent?
A respondent is the party to the contract on whom the claimant serves a payment claim.
Who is the Principal?
The Principle is the person or organisation with whom the contractor enters into the contract.
The principal can be;
- a principal as named in the contract, a developer or proprieter, or
- a contractor when engaing a subcontractor, or
- a subcontractor when ordering goods and services.
Who is a Contractor?
The contractor can be a person or organisation who;
- carries out construction work, or
- supplies to the site any goods related to construction work, or
- provides either on or off the site, professional services related to the construction work, or
- provides on-site services to the site where construction work is being carried out.
The contractor can be;
- a contractor as named in the contract, a builder or subcontractor, or
- a subcontractor engaged by a builder, or
- a supplier of goods and services
Who can claim?
If a payment dispute arises under a construction contract any party to the contract may apply to have a payment dispute adjudicated. These include;
- a contractor against the principal for the payment of an amount owing in relation to the performance under the contract, or
- a subcontractor to claim an amount owed by the contractor, or
- a principal against the contractor for payment resulting from the non-performance by the contractor.
What is covered/excluded under Adjudication?
A payment dispute cannot be adjudicated under the Act if;
- an application for adjudication under the Act has already been made by a party whether or not a determination has been made, or
- an order, judgement or other finding by an arbitrator or a court has already been made in relation to the dispute.
Application for Adjudication
The claimant must follow the procedure in the Act for applying for adjudication and this is set out under section 26 of the Act. The application must be served within 28 days of the payment dispute arising.
How does a payment dispute arise?
A payment dispute arise where;
There is a failure to pay within the following timeframes;
- if there is a written, within the time set out in the contract, or
- if there is no written contract within 28 days under the implied terms of the Act.
There is a failure to pay under either of the following instances pursuant to section 6 of the Act;
- if the principal rejects or disputes part of the claim, or
- if the principal makes a claim against a contractor for the non-performance of obligations under the construction contract and the contractor refuses to return monies owing for rectification of the work, or
- if security/retention money is not returned when due.
Response to an application for Adjudication
Within 14 days after the date of being served with an application for adjudication, the respondent must prepare a written response as set out in section 27 of the Act.
The Adjudicator's determination
The determination sets out the amount to be paid and the date on which the payment is to be made. An adjudicator must either dismiss the application or determine the payment dispute on its merits with 14 days after the date of the service of the response.
What happens if the Respondent does not pay?
If the respondent refuses or is unable to pay, then where a determination has been made in the claimant's favour, the claimant retains the right to recover the debt from a court of competant jurisdication. A determination signed and certified by the Registrar allows the court to treat the determination on its face value without recourse.
If the claimant is the contractor then a failure to pay allows the contractor to give notice in writing of their intention to suspend work under the contract. The contractor retains all rights under the contract including any right to terminate the contract and if the contractor suspends work there is no liability for loss or damage to the principal arising from the suspension.
How is an Adjudicator appointed?
An adjudicator is appointed either by the parties to the dispute or by a prescrived appointer. A prescribed appointer could be for example the Institute of Arbitrators and Mediators Australia (IAMA) or the Master Builders Association (MBA). The prescribed appointer must within 5 days after being served with the application appoint an adjudicator.